SAI-SUDHIR DEGREE & PG COLLEGE

SUBJECT: BUSINESS LAW

UNIT-4- COMPANY MANAGEMENT AND MEETINGS
TOPICS TO BE COVERED IN THE SESSION

 DIRECTORS
 NUMBER OF DIRECTORS
 QUALIFICATION OF DIRECTORS
 DISQUALIFICATION OF DIRECTORS
 NUMBER OF DIRECTORSHIPS
Directors:

 A director is a person from a group of members who leads, manage, or

supervise a company.
 The companies act 2013 does not define the term “director”. Sec 2(31)
simply provides that the term director means “a director appointed to the
board of a company”.
 The directors of a company collectively are referred as the “board of
directors” or “board”.
Definition of Directors:

 As per Section 2(34) of the companies act 2013 “Director means a director
appointed by the Board of a company”.
 As per Section 2(13) of companies act 1956 “Director includes any person
occupying the position of director by whatever name called”.
Number of Directors

 One-person company (OPC)- One director

 Private limited company-Two directors
 Public limited company- Three directors
 Maximum 15 directors can be appointed in any form of company. By
passing Special resolution company can increase the number of directors
beyond 15.
 Out of appointed directors one director should be resident in India for more
than 182 days in previous calendar year.
 It is implied that we need to alter AOA.
Qualifications of directors

 Qualification of directors is not prescribed in companies act but they are

implied.
1) Individual must have obtained DIN.
DIN-director identification number is a unique eight-digit number that is
required for any existing or proposed director of a company. It has been
introduced in India by way of the Companies amendment act 2006.
2) Individual should not be disqualified under 164.
Disqualifications of directors
The disqualifications are as follows:
I. Basic disqualifications.
1. Unsound mind.
The person who is not mentally fit cannot become a director
2. Insolvent.
 There are two clauses in this
 Declares insolvent by court
 Application pending
3. Convicted.
 The imprisonment not less than six months.
 If the imprisonment is more than 6 months the he is disqualified as a director for
5 years.
 If the imprisonment is for seven or more years he is disqualified as a director for
lifetime
Conti…………..

4. Disqualified by order of tribunal or court.

An order disqualifying him for appointment as a director has been passed by court or tribunal
(NCLT) and the order is in force
5. Not paid any calls.
He has not paid any calls in respect of any shares of the company held by him, whether alone
or jointly with others, and six months have elapsed from the last day fixed for the payment of
the call
6. Not obtained DIN
He has not been allotted DIN as required under section 152.
II. Additional disqualifications
1. Non-Filing of financial statements and annual returns for continuous 3 financial years.
2. Default in making payments of deposits, Debentures, Dividend, bonds etc